P. Sudeve v. M.S. Vertex Securities Ltd. & State of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** **THE HONOURABLE MR. JUSTICE N.K.BALAKRISHNAN** **MONDAY, THE 22ND AUGUST 2011 / 31ST SRAVANA 1933** **Crl.Rev.Pet.No. 2947 of 2003()** **---------------------------------------------** **CRA.269/2002 of SESSIONS COURT, KOZHIKOE CC.237/1999 of JUDL. MAGISTRATE OF FIRST CLASS-III, KOZHIKODE** **....................** ## **REVN. PETITIONER(S): APPELLANT/ACCUSED** **------------------------------------------------------------------** **P.SUDEVE, M/S. MALABAR CONSULTANTS, REGENCY BUILDING M.M. ALI ROAD, CALICUT 2.** **BY ADV. SRI.P.V.KUNHIKRISHNAN** ## **RESPONDENT(S): RESPONDENT/ COMPLAINANT & STATE** **----------------------------------------------------------------------------------** **1. M.S.VERTEX SECURITIES LTD., 2ND FLOOR, THOTTATHIL TOWERS, MARKET ROAD, KOCHI 14, REP.BY ITS BRANCH MANAGER, SRI.MANOJ K.ANTONY.** **2. STATE OF KERALA, REP.BY PUBLIC PROSECUTOR HIGH COURT OF KERALA.** **R1 BY ADVS. SRI.TOMY SEBASTIAN, SRI.SREEKANTH. V.M.** **R2 BY PUBLIC PROSECUTOR SRI.S.U.NAZAR** **THIS CRIMINAL REVISION PETITION HAVING BEEN FINALLY HEARD ON 22/08/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:** **tss** ## **N.K.BALAKRISHNAN, J. -------------------------------Crl.R.P. No.2947 of 2003 ---------------------------------Dated this the 22[nd] day of August 2011** ## **O R D E R** Petitioner is the accused in C.C.No.237/1999 which was filed against him by the first respondent/company alleging offence under Sec.138 of the N.I.Act. Complainant company was conducting business as share broker. The accused was doing share business through the complainant company. The case of the complainant is that towards that share transaction Ext.P2 cheque for Rs.10,000/- was issued by the accused which on presentment was bounced due to insufficiency of funds. On receipt of the statutory notice, the amount was not paid and hence the complaint was filed. No reply was also sent by the accused. 2. Before the court below, the Manager of the complainant company who was in charge of the business at the time of filing the complaint was examined as PW1 and Crl.R.P. No.2947 of 2003 -: 2 :- Exts.P1 to P5 were marked. No evidence was adduced on the side of the defence. 3. The learned Magistrate accepted the evidence given by the complainant as PW1 and found that Ext.P2 was issued by the accused in discharge of a legally enforceable debt/liability. The appeal filed by the accused was dismissed by the learned Sessions Judge. 4. Sri.P.V.Kunhikrihnan, the learned counsel appearing for the revision petitioner would submit that the very same complainant had filed two other complaints as C.C.Nos.172/1999 and 263/1999. The evidence adduced in those two cases was exactly identical to the evidence adduced in this case. The learned Magistrate after considering the evidence acquitted the accused in those two cases but convicted him in this case only. According to the learned counsel since the evidence was identical in all the three cases and since there is clear admission made by PW1 to the effect that there are accounts and other Crl.R.P. No.2947 of 2003 -: 3 :- documents pertaining to the transaction between the complainant and the accused, finding of guilt entered by the learned Magistrate cannot be sustained. The learned counsel would submit that learned appellate court did not consider the fact that other cases filed by the complainant based on identical evidence ended in acquittal. It is vehemently argued by the learned counsel for the accused, that the decision of the Apex Court in **Narayana Menon** v. **State of Kerala** [2006 (3) KLT 404] is squarely applicable to the facts of this case. In that case also the transaction was with regard to the business of the stock exchange. It was held by the Apex Court :- “The Second Respondent herein was a member of a Stock Exchange. The transactions in relation to the Stock Exchange are regulated by the statutes and statutory rules. If in terms of the provisions of a statute, a member of a Stock Exchange is required to maintain books of accounts in a particular manner, he would be required to do so, as non-compliance of the mandatory provisions of the Rules may entail punishment. It is not in dispute that transactions comprising purchases and sales of shares by Crl.R.P. No.2947 of 2003 ## -: 4 :- investors is a matter of confidence. Both parties would have to rely upon one another. For the said purpose, the courts of law may also take judicial notice of the practice prevailing in such business. The learned Appellate Judge rightly did so.” The definite case of the complainant was that Ext.P2 cheque was issued by the revision petitioner in discharge of the debt. That liability by way of debt arose in terms of the share transactions referred to by the complainant. But the books of account maintained by the company were not produced. Had the account books been produced that would have reflected the correct state of affairs. The learned counsel further submits that in this case there is another point also in favour of the accused, that the account books were not produced at all. That apart PW1 who mounted the witness box on behalf of the complainant company had no direct knowledge regarding the transaction. True that even if the person/officer who was in charge of the affairs of the company could not give evidence, the evidence regarding the transaction can be Crl.R.P. No.2947 of 2003 -: 5 :- produced by the Manager who subsequently came to the picture provided he produces accounts relating to the same. The mere oral assertion made by PW1 that he had occasion to go through the accounts and he was satisfied from the accounts that the amount was due from the accused to the complainant company cannot satisfy the legal requirements to prove that there was amount due from the accused to the complainant company. The learned counsel would further submit that the mere fact that Ext.P2 cheque bears the signature of the accused does not amount to proof of execution of the cheque so as to draw the presumption under Sec.139 of the N.I.Act. 5. The learned counsel has also relied upon the decision of the Apex Court in **Kundan Lal Rallaram** v. **Custodian, Evacuee Property, Bombay** [AIR 1961 SC 1316] which considered the presumption available under Sec.118 of the N.I.Act and also Sec.114 of the Evidence Act. It was held that the evidence required to shift the burden Crl.R.P. No.2947 of 2003 -: 6 :- under Sec.118 of the N.I.Act need not necessarily be directed evidence ie; oral or documentary evidences or admission made by opposite party. The presumption under Sec.118 was sought to be drawn in a suit filed by the plaintiff in a civil case for recovering of money. Considering the presumptions of law or fact it was observed by the Apex Court :- “The aforesaid evidence discloses the circumstances under which the stock-in-trade of the appellant was transferred to Abdul Satar Ahmedbhoy and the promissory note was endorsed in his favour. It also establishes that the appellant had documentary evidence as well as oral evidence to prove that consideration passed, but he willfully withheld them. The said circumstantial evidence and the willful withholding of the material evidence in the case would be legal evidence on the basis of which the Custodian-General held that the presumption raised under S.118 of the Negotiable Instruments Act was rebutted.” Therefore, relying upon the aforesaid dictum the learned counsel submits that non production of the account books has certainly to be taken note of as a circumstance against Crl.R.P. No.2947 of 2003 -: 7 :- the complainant, especially because PW1 had no direct knowledge regarding the transaction in question. 6. The learned Magistrate and the learned Sessions Judge found that non sending of reply notice would prove that the accused had nothing to say against the contents of the notice, for, otherwise the natural conduct would be to send a reply refuting the allegations contained in the notice. 7. The contention raised by the accused that Majo K. Antony who happened to be in possession of the signed blank cheque leaves which were given to him by the accused who had occasion to go to the complainant's office in connection with the share business, caused this complaint to be filed, after the business of the complainant company was closed, does not inspire confidence in view of the fact that Majo K. Antony who is not the Manager of the company cannot gain anything by causing the complaint to be filed through somebody else. It is a case where the learned Magistrate and also the Sessions Judge found that Crl.R.P. No.2947 of 2003 -: 8 :- Ext.P1 was issued by the accused in discharge of a legally enforceable debt. This Court sitting in revision should not upset that finding unless it is wholly erroneous. But the learned counsel Sri.Kunhikrishnan submits that in view of the fact that the account books were not produced at all and since the courts simply accepted the unsupported oral vibration of PW1 it has to be found that the findings recorded by the courts below were erroneous. As such, according to the learned counsel the concurrent finding can be interfered with. 8. The complainant/respondent is not represented by anybody before this Court. Since the relevant account books and other records were not produced by the complainant, it will not be safe to rely upon the oral testimony of PW1 alone. He did not produce the account books though it was stated that such account books were actually available. As such, I find that the judgments of conviction passed by the two courts below are liable to be Crl.R.P. No.2947 of 2003 -: 9 :- set aside. But at the interest of justice, I find that the complainant has to be given an opportunity to adduce further evidence in the matter. In the result, this Crl.R.P. is allowed in part. The conviction and sentence passed against him are set aside and the case is remanded to J.F.C.M.-III, Kozhikode for fresh disposal. Both sides are given opportunity to adduce further evidence in the matter. Both sides will appear before the learned Magistrate on **29.9.2011.** **N.K.BALAKRISHNAN, JUDGE.** Jvt